Legal Question in Business Law in Washington
Failure to refund overcharged sales tax
I purchased items for resale from Disney Shopping Inc. (Buena Vista). I have attempted to provide verification of my tax-exempt status as a reseller 2 separate times. I am getting brushed off and Disney now owes my company about $500 in sales tax. I am an LLC in WA who collects and remits sales tax on items sold in WA. How do I proceed if they refuse to refund?
1 Answer from Attorneys
Re: Failure to refund overcharged sales tax
I would want to know a lot more information to give a better answer, but here is a starter to hopefully point you in the right direction. First, if you are purchasing from a branch of Disney that specifically deals with resellers, I am confused on why they would even sell to you without proof of your tax exempt status to begin with? It is as if any member of the general public could purchase from this particular branch or office that you purchase from, is that right?
Second, the first point aside, considering the total damages here are $500, I am not sure if it is worth your while to pursue, considering that if yo pay an attorney, you'll probably pay way beyond $500 to get this resolved, and if you handle it yourself, you'll probably lose at least $500 dealing with this matter rather than getting on with your own business. Time is money. Always remember that.
One option is to return the items and ask for a full refund or partial refund if you have sold some of it. When they ask why you returned stuff, you can tell the customer service agent the reason, and if anyone gives a you know what, someone with two brain cells may actually take care of the situation right then and there.
Third, if this goes beyond common sense and your only recourse is court action, then check your purchase contract very carefully for a "choice of forum" clause which will probably dictate that any litigation arising out of the contract shall be heard in a court most likely far away from Washington. My guess is either Delaware or California or Florida�anywhere but close to you. That means you'd have to sue them there, although you could sue them here and for reasons much too complex for me to explain here in the short space provided, you might get a court here to take jurisdiction. Personally, if you have an ongoing business concern, this last resort is not an advisable use of your time and money.
I think you're better off chalking this one up to experience and next time either refuse to do business with Disney, and if they have a rep, tell the rep exactly why. If they're commission based, they'll likely try to get your taxes refunded and offer you a deal to come back.
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